Summary: States can do much to tap community-level energies, and resources for development, if they seek to interact more synergistically with local communities. The broader spin-off is creating a developmental society, and polity. Using case studies from Asia and Latin America, the authors show how: 1) State efforts to bring about land reform, tenancy reform, and expanding non-crop sources of income, can broaden the distribution of power in rural communities, laying the basis for more effective community-driven collective action; and 2) Higher levels of government can form alliances with communities, putting pressure on local authorities from above, and below to improve development outcomes at the local level. These alliances can also be very effective in catalyzing collective action at community level, and reducing :local capture" by vested interests. There are several encouraging points that emerge from these case studies. First, these powerful institutional changes do not necessarily take long to generate. Second, they can be achieved in a diversity of settings: tightly knit or loose-knit communities; war-ravaged, or relatively stable; democratic, or authoritarian; with land reform, or (if carefully managed) even without. Third, there are strong political payoffs in terms of legitimacy, and popular support for those who support such developmental action.